As many medical professionals well know, there are innumerable unscrupulous financial hucksters out there who prey upon various groups of investors in all categories, but physicians and dentists seem to be among their favorite targets. First, it should be said that most people working in financial services are honest and provide valuable services, but it’s the bad actors we’re concerned with here. Doctors and dentists often feel they are disproportionately the victims of all sorts of financial and investment fraud. But what are the reasons behind this financial phenomenon?
1-Doctors are usually too busy to complete the correct financial process. Doctors often do not have enough time to be thorough in researching financial products, investment services and especially, the people who sell them. Too often, medical professionals attempt to short cut the process by referencing generic (and often biased) on-line resources, asking other medical professionals and friends about financial matters, and otherwise resort to unreliable means of trying to find the truth about financial products and services. They too often do not feel like they have the time to complete the demanding process of due diligence required to make a thorough, quality decision.
2-Engaging in financial products and services is not like dealing with pharmaceutical sales people. The familiar interplay between MDs and pharmaceutical sales people often conditions doctors to think a certain way when they hear a sales pitch. But the psychology of financial sales people is quite different from the often attractive and friendly pharma sales persons that doctors know. The products financial dealers are selling are not tangible, and can often be downright illusory. The sales process for financial products and services utilize carefully crafted psychological visualizations of future financial security, and may even take advantage of certain avaricious impulses lurking deep in the subconscious of the prospect. This is fundamentally different from the tangible, practical, ethical applications offered by pharma product lines. But the psychological process of engaging the heart and mind of the medical professional is rather similar, which is why many pharma sales people often move on to careers on Wall Street.
3-Medical professionals are usually above average in intelligence; but this does not automatically make them wise financial managers or successful investors. There is a difference between intellectual capacity, scientific and ethical talent, and financial wisdom. Although most medical professionals are usually quite smart, that does not necessarily make them financially savvy or anything close to superior investors. Experienced financial advisors can tell you sad stories about otherwise smart doctors making consistently foolish financial and investment decisions based on hearsay, medical culture groupthink and other sociological factors. MDs and other medical professionals eventually learn (sometimes after significant expense and capital loss) that being a smart doctor does not make you a savvy financial operator, and may in fact be an impediment to financial success, especially for younger docs under 40 years old.
The above factors are only a few of the vulnerabilities that expose MDs and other medical professionals to all sorts of financial chicanery. Keep in mind that when a new investment sales person is looking for prospects, MDs, Dentists and other medical professionals are at the top of their lists. They know that docs make a relatively good income and need retirement investments and other services. Make sure to keep these sales people at bay and make them substantiate in writing everything they claim. Enlongate the process, take time to make a decision. Then you must take the time to research everything you’ve been pitched. And yes, an experienced and impartial fee-only Certified Financial Planner can help with this challenge.